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Public sector job cuts set to raise unemployment total

Significant public sector job cuts are set to reverse the downturn in unemployment in the weeks ahead according to a survey.

Redundancies are on course to almost double in the first quarter as the jobless pain extends deep into the public sector with the biggest casualties in administrative ranks and defence. The recovery among private employers will not be strong enough to offset the public sector shakeout says the quarterly analysis by the Chartered Institute of Personnel and Development and business advisers KPMG.

The survey, covering more than 700 public and private sector employers, shows 181 of them plan an average 6.2pc cut in their workforces by the end of the first quarter, against 3.8pc in the final three months last year.

A report from the ICAEW showed that three out of five businesses are still running below capacity, indicating that even if the economy grows, it may be a jobless recovery.